Alexion Reports Fourth Quarter and Full Year 2012 Results

Thu Feb 14, 2013 6:30am EST

* Reuters is not responsible for the content in this press release.

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130214:nBw145304a

http://www.businesswire.com/news/home/20130214005304/en

- Soliris (eculizumab) Net Product Sales Increased 45 Percent to $1.134 Billion
in 2012 - 

- Continued Steady Growth of Soliris in PNH - 

- aHUS Launch Progresses with Increasing Number of New Patients Starting on
Soliris - 

- Pipeline Advances with Five Therapeutic Candidates Targeting Severe and
Ultra-Rare Disorders - 

Fourth Quarter 2012 Financial Highlights:

* Q4 2012 net product sales increased 41 percent to $320.5 million, compared to
$227.6 million in Q4 2011. 
* Q4 2012 GAAP net income increased 68 percent to $81.0 million, or $0.40 per
share, compared to Q4 2011 GAAP net income of $48.2 million, or $0.25 per share.

* Q4 2012 non-GAAP net income increased 52 percent to $122.3 million, or $0.60
per share, compared to Q4 2011 non-GAAP net income of $80.5 million, or $0.41
per share.

Full-Year 2012 Financial Highlights:

* 2012 net product sales increased 45 percent to $1.134 billion, compared to
$783.4 million in 2011. 
* 2012 GAAP net income increased 45 percent to $254.8 million, or $1.28 per
share, compared to 2011 GAAP net income of $175.3 million, or $0.91 per share. 
* 2012 non-GAAP net income increased 60 percent to $425.2 million, or $2.13 per
share, compared to 2011 non-GAAP net income of $266.1 million, or $1.38 per
share.

CHESHIRE, Conn.--(Business Wire)--
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial results
for the quarter and year ended December 31, 2012. For the three months ended
December 31, 2012, Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company")
reported net product sales of Soliris (eculizumab) of $320.5 million, compared
to $227.6 million for the same period in 2011. The year-on-year increase in net
product sales of 41 percent reflected steady additions of new patients with
paroxysmal nocturnal hemoglobinuria (PNH) globally, and an increasing number of
new patients with atypical Hemolytic Uremic Syndrome (aHUS) commencing Soliris
treatment. 

Soliris is approved for patients with PNH in the US, European Union, Japan and
other territories as the first and only treatment indicated for this ultra-rare,
debilitating and life-threatening blood disease. Soliris is also approved for
patients with aHUS in the US and European Union as the first and only treatment
indicated for this ultra-rare, life-threatening, genetic disease. 

Alexion's non-GAAP operating results are equal to GAAP operating results
adjusted for the impact of share-based compensation expense, acquisition-related
costs, taxes related to acquisition structuring, intellectual property
settlements, intangible asset impairments and non-cash taxes. A full
reconciliation of non-GAAP results is included later in this press release. 

Fourth Quarter Non-GAAP Financial Results:

The Company reported non-GAAP net income of $122.3 million, or $0.60 per share
in Q4 2012, compared to non-GAAP net income of $80.5 million, or $0.41 per
share, in Q4 2011. 

Alexion's non-GAAP operating expenses for Q4 2012 were $163.2 million, compared
to $111.2 million for Q4 2011. Non-GAAP research and development (R&D) expenses
for Q4 2012 were $59.9 million, compared to $32.1 million for Q4 2011. Non-GAAP
selling, general and administrative (SG&A) expenses for Q4 2012 were $103.3
million, compared to $79.1 million for Q4 2011. 

Fourth Quarter GAAP Financial Results:

Alexion reported GAAP net income of $81.0 million, or $0.40 per share in Q4
2012, compared to Q4 2011 GAAP net income of $48.2 million, or $0.25 per share. 

On a GAAP basis, operating expenses for Q4 2012 were $179.5 million, compared to
$123.4 million for Q4 2011. GAAP R&D expenses for Q4 2012 were $63.4 million,
compared to $34.4 million for Q4 2011. GAAP SG&A expenses for Q4 2012 were
$112.6 million, compared to $86.6 million for Q4 2011. Acquisition-related costs
for Q4 2012 were $3.4 million, compared to $2.3 million for Q4 2011. 

Full Year 2012 Non-GAAP Financial Results:

The Company reported non-GAAP net income of $425.2 million in 2012, or $2.13 per
share, compared to non-GAAP net income of $266.1 million, or $1.38 per share, in
2011. 

Alexion's non-GAAP operating expenses for the full year 2012 were $556.2
million, compared to $403.2 million for 2011. Non-GAAP R&D expenses for 2012
were $208.9 million, compared to $127.7 million for the prior year. Non-GAAP
SG&A expenses for 2012 were $347.3 million, compared to $275.5 million in 2011. 

Full Year 2012 GAAP Financial Results:

Alexion reported GAAP net income of $254.8 million, or $1.28 per share, in 2012
compared to 2011 GAAP net income of $175.3 million, or $0.91 per share. 

Alexion's GAAP operating expenses for the full year 2012 were $656.9 million,
compared to $459.5 million for the prior year. GAAP R&D expenses for 2012 were
$222.7 million, compared to $137.4 million in 2011. GAAP SG&A expenses for 2012
were $384.7 million, compared to $308.2 million for the prior year.
Acquisition-related costs for 2012 were $22.8 million, compared to $13.5 million
for 2011. In Q3 2012, the Company also recorded an intangible asset impairment
of $26.3 million. 

Balance Sheet:

As of December 31, 2012, the Company had $989.5 million in cash and cash
equivalents compared to $540.9 million at December 31, 2011. 

"In 2012, we continued to expand the global presence of our PNH operations as we
also commenced our activities to transform the lives of patients suffering with
aHUS," said Leonard Bell, M.D., Chief Executive Officer of Alexion. "Throughout
2013, we will focus on serving more patients with PNH and aHUS globally, and at
the same time, we will advance our nine lead development programs in severe and
ultra-rare disorders with Soliris and four additional highly innovative
therapeutics." 

Research and Development Progress:

Alexion currently has development programs underway with its five highly
innovative therapeutic candidates: eculizumab (Soliris) and four additional
novel therapeutic candidates beyond eculizumab that have the potential to become
first-in-class therapies for patients with other severe and ultra-rare
disorders. 

Ultra-Rare Disease Programs With Eculizumab

* Nephrology- STEC-HUS: Data from the full cohort of 198 enrolled patients in
the Company-sponsored Shiga-toxin-producing E. coli hemolytic uremic syndrome
(STEC-HUS) trial were presented at the American Society of Nephrology (ASN)
meeting. Preliminary findings from an exploratory post hoc, matched-control
analysis of patients with severe STEC-HUS receiving eculizumab versus other
patients who received only best supportive care during the German epidemic were
also reported at ASN. 
* Nephrology- Kidney Transplant: Eculizumab is now being evaluated in two
different potential kidney transplant indications. Enrollment is ongoing in
Company-sponsored, multi-national, living-donor and deceased-donor kidney
transplant trials in patients at elevated risk of Acute Humoral Rejection (AHR),
also known as antibody mediated rejection. Alexion is also expanding its kidney
transplant program to include a delayed-graft function (DGF) clinical trial. 
* Neurology- NMO: The Company has commenced discussions with regulators in both
the United States and Europe to discuss plans for a Company-sponsored
multi-national, placebo-controlled, registration trial in relapsing
neuromyelitis optica (NMO). 
* Neurology- MG: Alexion continues to work with investigators to design the next
clinical trial to evaluate eculizumab as a treatment for patients with severe
myasthenia gravis (MG).

Ultra-Rare Disease Programs With Highly Innovative Therapeutic Candidates Beyond
Eculizumab

* Asfotase Alfa: A natural history study is ongoing in infants with
hypophosphatasia (HPP), an ultra-rare, inherited and life-threatening metabolic
disease. The Company is also completing optimization of the manufacturing
process for asfotase alfa. 
* cPMP Replacement Therapy: Alexion is developing a cPMP replacement therapy for
the treatment of patients with Molybdenum Cofactor Deficiency Type A, a severe,
ultra-rare and genetic metabolic disorder that is fatal in newborns. The Company
continues to accelerate the regulatory and manufacturing processes for this
therapeutic candidate and expects to initiate clinical studies in mid-2013. 
* ALXN1102/ALXN1103: Enrollment continues in a Phase I study to characterize the
mechanism of action and develop initial safety data for ALXN1102 and ALXN1103,
intravenous and sub-cutaneous versions, respectively, of one of Alexion`s novel
complement inhibitors. 
* ALXN1007: The Company has completed dosing in a Phase I study of ALXN1007, a
novel anti-inflammatory antibody, to evaluate the safety, tolerability,
pharmacokinetics and pharmacodynamics of this therapeutic candidate in healthy
volunteers.

2013 Financial Guidance:

In 2013, worldwide net product sales are expected to be within a range of $1.490
to $1.505 billion. On a non-GAAP basis, R&D expenses are expected to be in the
range of $285 to $295 million, and SG&A expenses in the range of $425 to $435
million. Cost of sales is expected to be approximately 10 percent of net product
sales. The non-GAAP effective tax rate, reported on a cash tax liability basis,
is expected to be in the range of 7 to 9 percent. Based on a forecast of
approximately 205 million diluted shares outstanding, Alexion is providing
guidance of $2.82 to $2.92 for non-GAAP earnings per share for the year. The
Company`s GAAP effective tax rate is expected to be in the range of 29 to 31
percent. The Company's share-based compensation expense for the year is expected
to be in a range of $63 to $67 million. 

Conference Call/Web Cast Information:

Alexion will host a conference call/webcast to discuss matters mentioned in this
release. The call is scheduled for today, February 14, at 10:00 a.m., Eastern
Time. To participate in this conference call, dial 888-206-4836 (USA) or
913-312-1267 (International), passcode 5044697 shortly before 10:00 a.m. ET. A
replay of the call will be available from 1:00 p.m. ET through a limited time
thereafter. The replay number is 888-203-1112 (USA) or 719-457-0820
(International), passcode 5044697. The audio webcast can be accessed at
www.alexionpharma.com. 

About Soliris:

Soliris is a first-in-class terminal complement inhibitor developed from the
laboratory through regulatory approval and commercialization by Alexion. Soliris
is approved in the US, European Union, Japan and other countries as the first
and only treatment for patients with paroxysmal nocturnal hemoglobinuria (PNH),
a debilitating, ultra-rare and life-threatening blood disorder, characterized by
complement-mediated hemolysis (destruction of red blood cells). Soliris is
indicated to reduce hemolysis. Soliris is also approved in the US and the
European Union as the first and only treatment for patients with atypical
hemolytic uremic syndrome (aHUS), a debilitating, ultra-rare and
life-threatening genetic disorder characterized by complement-mediated
thrombotic microangiopathy, or TMA (blood clots in small vessels). Soliris is
indicated to inhibit complement-mediated TMA. The effectiveness of Soliris in
aHUS is based on the effects on TMA and renal function. Prospective clinical
trials in additional patients are ongoing to confirm the benefit of Soliris in
patients with aHUS. Soliris is not indicated for the treatment of patients with
Shiga toxin E. coli related hemolytic uremic syndrome (STEC-HUS). For the
breakthrough innovation in complement inhibition, Alexion and Soliris have
received the pharmaceutical industry's highest honors: the 2008 Prix Galien USA
Award for Best Biotechnology Product with broad implications for future
biomedical research and the 2009 Prix Galien France Award in the category of
Drugs for Rare Diseases. More information including the full prescribing
information on Soliris is available at www.soliris.net. 

About Alexion:

Alexion Pharmaceuticals, Inc. is a biopharmaceutical company focused on serving
patients with severe and ultra-rare disorders through the innovation,
development and commercialization of life-transforming therapeutic products.
Alexion is the global leader in complement inhibition and has developed and
markets SolirisĀ® (eculizumab) as a treatment for patients with PNH and aHUS, two
debilitating, ultra-rare and life-threatening disorders caused by chronic
uncontrolled complement activation. Soliris is currently approved in more than
40 countries for the treatment of PNH, and in the United States and European
Union for the treatment of aHUS. Alexion is evaluating other potential
indications for Soliris and is developing four other highly innovative
biotechnology product candidates, which are being investigated across nine
severe and ultra-rare disorders beyond PNH and aHUS. This press release and
further information about Alexion Pharmaceuticals, Inc. can be found at:
www.alexionpharma.com. 

[ALXN-E] 

This news release contains forward-looking statements, including statements
related to guidance regarding anticipated financial results for 2013, assessment
of the Company's financial position and commercialization efforts, medical
benefits and commercial potential for Soliris for PNH and aHUS and other
potential indications, expansion of clinical and commercial operations to
additional countries, medical and commercial potential of Alexion's
complement-inhibition technology and other technologies, plans for clinical
programs for each of our product candidates and progress in developing
commercial infrastructure. Forward-looking statements are subject to factors
that may cause Alexion's results and plans to differ from those expected,
including for example, decisions of regulatory authorities regarding marketing
approval or material limitations on the marketing of Soliris for PNH and aHUS
and other potential indications, delays in arranging satisfactory manufacturing
capabilities and establishing commercial infrastructure, the possibility that
results of clinical trials are not predictive of safety and efficacy results of
Soliris in broader patient populations in the disease studied or other diseases,
the risk that acquisitions will not result in short-term or long-term benefits,
the possibility that current results of commercialization are not predictive of
future rates of adoption of Soliris in PNH, aHUS or other diseases, the risk
that third parties will not agree to license any necessary intellectual property
to Alexion on reasonable terms or at all, the risk that third party payors
(including governmental agencies) will not reimburse or continue to reimburse
for the use of Soliris at acceptable rates or at all, the risk that estimates
regarding the number of patients with PNH, aHUS or other disorders are
inaccurate, and a variety of other risks set forth from time to time in
Alexion's filings with the US Securities and Exchange Commission, including but
not limited to the risks discussed in Alexion's Quarterly Report on Form 10-Q
for the three and nine-month periods ended September 30, 2012 and in our other
filings with the US Securities and Exchange Commission. Alexion does not intend
to update any of these forward-looking statements to reflect events or
circumstances after the date hereof, except when a duty arises under law.

In addition to financial information prepared in accordance with GAAP, this news
release also contains non-GAAP financial measures that we believe, when
considered together with the GAAP information, provide investors and management
with supplemental information relating to performance, trends and prospects that
promote a more complete understanding of our operating results and financial
position during different periods. These non-GAAP financial measures are not
intended to be considered in isolation or as a substitute for, or superior to,
the financial measures prepared and presented in accordance with GAAP and should
be reviewed in conjunction with the relevant GAAP financial measures. Please
refer to the attached Reconciliation of GAAP to Non-GAAP Net Income for
explanations of the amounts adjusted to arrive at non-GAAP net income and
non-GAAP earnings per share amounts for the three and twelve month periods ended
December 31, 2012 and 2011.

(Tables Follow)

                                                                                                                                                                 
 ALEXION PHARMACEUTICALS, INC.                                                                                                                                   
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                                                                                 
 (in thousands, except per share amounts)                                                                                                                        
 (unaudited)                                                                                                                                                     
                                                                                                                                                                 
                                                           Three months ended                                  Twelve months ended                               
                                                           December 31                                         December 31                                       
                                                           2012                         2011                   2012                           2011               
                                                                                                                                                                 
 Net product sales                                         $    320,526                 $    227,559           $    1,134,114                 $    783,431       
                                                                                                                                                                 
 Cost of sales                                                  33,147                       28,798                 126,214                        93,140        
 Gain on intellectual property settlement                       -                            -                      (53,377    )                   -             
                                                                                                                                                                 
 Total cost of sales                                            33,147                       28,798                 72,837                         93,140        
                                                                                                                                                                 
 Research and development                                       63,409                       34,398                 222,732                        137,421       
 Selling, general and administrative                            112,624                      86,567                 384,678                        308,176       
 Impairment of intangible asset                                 -                            -                      26,300                         -             
 Acquisition-related costs                                      3,365                        2,322                  22,812                         13,486        
 Amortization of purchased intangible assets                    105                          104                    417                            382           
                                                                                                                                                                 
 Total operating expenses                                       179,503                      123,391                656,939                        459,465       
                                                                                                                                                                 
 Operating income                                               107,876                      75,370                 404,338                        230,826       
                                                                                                                                                                 
 Interest and other expense                                     606                          1,292                  6,772                          1,158         
                                                                                                                                                                 
 Income before income taxes                                     107,270                      74,078                 397,566                        229,668       
                                                                                                                                                                 
 Income tax provision                                           26,298                       25,908                 142,744                        54,353        
                                                                                                                                                                 
 Net income                                                $    80,972                  $    48,170            $    254,822                   $    175,315       
                                                                                                                                                                 
 Earnings per common share                                                                                                                                       
 Basic                                                     $    0.42                    $    0.26              $    1.34                      $    0.96          
 Diluted                                                   $    0.40                    $    0.25              $    1.28                      $    0.91          
                                                                                                                                                                 
 Shares used in computing earnings per common share                                                                                                              
 Basic                                                          194,141                      184,452                190,461                        183,220       
 Diluted                                                        201,061                      193,370                198,501                        191,806       
                                                                                                                                                                 


                                                                                                                                                                    
 ALEXION PHARMACEUTICALS, INC.                                                                                                                                      
 RECONCILIATION OF GAAP TO NON-GAAP NET INCOME                                                                                                                      
 (in thousands, except per share amounts)                                                                                                                           
 (unaudited)                                                                                                                                                        
                                                                                                                                                                    
                                                                           Three months ended                            Twelve months ended                        
                                                                           December 31                                   December 31                                
                                                                           2012                       2011               2012                         2011          
                                                                                                                                                                    
 GAAP net income                                                           $     80,972               $     48,170       $    254,822                 $    175,315  
                                                                                                                                                                    
 Share-based compensation expense (1)                                            13,691                     10,337            54,013                       44,763   
 Acquisition-related costs (2)                                                   3,365                      2,322             22,812                       13,486   
 Amortization of purchased intangible assets                                     105                        104               417                          382      
 Non-cash taxes (3)                                                              24,158                     19,547            98,364                       32,155   
 Tax related to acquisition structuring (4)                                      -                          -                 21,812                       -        
 Gain on intellectual property settlement (5)                                    -                          -                 (53,377  )                   -        
 Impairment of intangible asset (6)                                              -                          -                 26,300                       -        
                                                                                                                                                                    
 Non-GAAP net income                                                       $     122,291              $     80,480       $    425,163                 $    266,101  
                                                                                                                                                                    
 Shares used in computing diluted earnings per share (GAAP)                      201,061                    193,370           198,501                      191,806  
 Shares used in computing diluted earnings per share (non-GAAP)                  202,249                    194,732           199,787                      193,539  
                                                                                                                                                                    
 GAAP earnings per share - diluted                                         $     0.40                 $     0.25         $    1.28                    $    0.91     
 Non-GAAP earnings per share - diluted                                     $     0.60                 $     0.41         $    2.13                    $    1.38     
                                                                                                                                                                    


                                                                                                                                                               
 (1)    The following table summarizes the share-based compensation expense for each expense category in our condensed consolidated statements of operations:  
                                                                                                                                                               


                                                                                                                                                               
                                                                           Three months ended                          Twelve months ended                     
                                                                           December 31                                 December 31                             
                                                                           2012                      2011              2012                      2011          
          Share-based compensation expense:                                                                                                                    
          Cost of sales                                                    $     876                 $     613         $     2,815               $     2,375   
          Research and development                                               3,466                     2,270             13,839                    9,759   
          Selling, general and administrative                                    9,349                     7,454             37,359                    32,629  
                                                                           $     13,691              $     10,337      $     54,013              $     44,763  
                                                                                                                                                               
 (2  )    The following table summarizes acquisition-related costs:                                                                                            
                                                                                                                                                               
                                                                           Three months ended                          Twelve months ended                     
                                                                           December 31                                 December 31                             
                                                                           2012                      2011              2012                      2011          
          Acquisition-related costs:                                                                                                                           
          Separately-identifiable employee costs                           $     117                 $     -           $     3,669               $     6,597   
          Professional fees                                                      1,031                     2,039             12,593                    5,489   
          Changes in fair value of contingent consideration                      2,217                     283               6,550                     1,400   
                                                                           $     3,365               $     2,322       $     22,812              $     13,486  
                                                                                                                                                               


                                                                                                                                                                                                                                                                                                                                                
 (3)    Non-cash taxes represents the adjustment from GAAP tax expense to the amount of taxes that are payable in cash. The adjustment includes tax amounts that are not currently payable in cash due to the continued utilization of our US net operating losses and credits.                                                                 
                                                                                                                                                                                                                                                                                                                                                
        In the third quarter of 2011, we elected to claim foreign tax and orphan drug credits resulting in a tax benefit of $16,300. The non-cash tax adjustment for the twelve months ended December 31, 2011 include these tax benefits which were recognized in the GAAP tax provision and were not received in cash.                        
                                                                                                                                                                                                                                                                                                                                                
 (4)    The tax provision for the twelve months ended December 31, 2012 includes tax expense of $21,812 related to the structuring of the Enobia acquisition.                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                
 (5)    In October 2012, we entered into a settlement and license agreement which included an upfront payment. The Company recognized a gain of $53,377 in cost of sales during the three months ended September 30, 2012, which was the result of a reversal of a portion of the accrued liability, net of the effect of the upfront payment.  
                                                                                                                                                                                                                                                                                                                                                
 (6)    During the three months ended September 30, 2012, we recorded an impairment of an acquired in-process research and development asset of $26,300 related to a preclinical AMD program.                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                


                                                                                                  
 ALEXION PHARMACEUTICALS, INC.                                                                    
 CONDENSED CONSOLIDATED BALANCE SHEETS                                                            
 (in thousands)                                                                                   
 (unaudited)                                                                                      
                                                                                                  
                                                     December 31              December 31,        
                                                     2012                     2011                
 Cash and cash equivalents                           $       989,501          $        540,865    
 Trade accounts receivable, net                              295,598                   244,288    
 Inventories, net                                            94,521                    81,386     
 Deferred tax assets, current                                26,086                    19,132     
 Other current assets                                        89,894                    55,599     
 Property, plant and equipment, net                          165,629                   165,852    
 Deferred tax assets, noncurrent                             13,954                    103,868    
 Intangible assets, net                                      646,678                   91,604     
 Goodwill                                                    253,645                   79,639     
 Other noncurrent assets                                     38,054                    12,518     
 Total assets                                        $       2,613,560        $        1,394,751  
                                                                                                  
 Accounts payable and accrued expenses               $       271,275          $        199,653    
 Current portion of long-term debt                           48,000                    -          
 Other current liabilities                                   40,814                    28,132     
 Long-term debt                                              101,000                   -          
 Contingent consideration                                    139,002                   18,120     
 Other noncurrent liabilities                                42,619                    14,354     
 Total liabilities                                           642,710                   260,259    
                                                                                                  
 Total stockholders' equity                                  1,970,850                 1,134,492  
 Total liabilities and stockholders' equity          $       2,613,560        $        1,394,751  
                                                                                                  


Alexion Pharmaceuticals, Inc.
Irving Adler, 203-271-8210
Executive Director, Corporate Communications
or
Alexion Pharmaceuticals, Inc.
(Media)
Kim Diamond, 203-439-9600
Director, Corporate Communications
or
Rx Communications
(Investors)
Rhonda Chiger, 917-322-2569 



Copyright Business Wire 2013

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.